Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday said it is scheduled to start building a new facility early next year in Greater Tainan, part of a NT$500 billion (US$17 billion) advanced capacity expansion scheme by the world’s biggest contract chipmaker over the next five years.
The investment plan follows a two-quarter downturn caused by inventory correction, as TSMC chief executive Morris Chang (張忠謀) predicted in July.
It comes amid a gradual slowdown for the chip industry, for which Chang forecast 3 percent annual growth in revenue next year.
However, TSMC’s growth pattern will not be as closely tied to the global chip industry as before because the company is driving growth by investing in advanced technologies and those investments are paying off, Chang said three months ago.
The Hsinchu-based company budgeted a record high US$8.3 billion for spending on new equipment this year.
“Fab 14, which we continue to expand capacity for, is an essential manufacturing site for TSMC to make advanced 20-nanometer chips and new-generation chips,” TSMC executive vice president and co-chief operating officer Chiang Shang-yi (蔣尚義) said in a statement.
TSMC’s factories in the Southern Taiwan Science Park (南部科學園區) generated NT$180 billion in revenue last year, about 42 percent of the chipmaker’s total revenue, Chiang said.
“The factory will be the world’s first 12-inch factory producing 20-nanometer system-on-chips and the first 16-nanometer FinFet chip manufacturing site for TSMC,” Chiang said.
He was speaking at a groundbreaking ceremony for the sixth phase of the chipmaker’s advanced Fab 14 factory, seven months after TSMC started construction of the factory’s fifth-phase facility in April.
The new five-year capacity expansion plan is expected to create 7,000 jobs at the Southern Taiwan Science Park in Greater Tainan, in addition to the 9,000 workers already employed there, he said.
The Fab 14 factory, which has a quarterly capacity of 540,000 12-inch wafers, produces 1,200 types of chip for TSMC’s 150 global clients.
Over the past 15 years, TSMC has invested NT$450 billion in building an 8-inch factory, an advanced chip testing and packaging factory, and the 12-inch Fab 14 in the science park.
Separately, TSMC CEO Morris Chang said in a letter to employees yesterday that the company wanted workers to work no more than 50 hours per week. Based on labor law, a 42-hour week is the norm.
The company will award overtime pay, or allow employees to take extra days off for their overtime working hours based on the Labor Standards Act (勞基法), Chang said in the letter.
However, working long hours should not become the norm, he added.
“Working efficiency is more important than working hours,” Chang said.